ETF Securities, one of the world’s leading providers of commodity exchange-traded products, has launched a series of short and leveraged (S&L) products on the London Stock Exchange. The new additions include 18 S&L commodity ETPs and six S&L currency ETPs, with leverage of 3x and 5x respectively.
Townsend Lansing, Executive Director – Head of S&L and FX Platforms, ETF Securities (UK).
Commenting on the launch, Townsend Lansing, Executive Director – Head of Short and Leveraged & FX Platforms, ETF Securities (UK), said: “We are listing these new S&L products on the London Stock Exchange in response to a strong demand from investors. We have seen tremendous growth in our S&L platform across Europe over the last few years. ETF Securities own platform has experienced US$135m of inflows year to date.” (Figures as of 13 November 2015)
One of the biggest themes of this year has been increased volatility in both currency and commodity markets. Policy divergence between the US Federal Reserve and the central banks of Europe and Japan has been a major factor driving exchange rates between the world’s major currencies, and the uncertain timing of tighter US monetary policy may keep markets on edge for some time. Furthermore, the slowdown of global growth coupled with major event risk such as the summer stock market crash in China has added uncertainty to emerging markets and even a possibility of currency wars, further raising the volatility of the entire system.
Uncertainty over global growth may also continue to translate into increased volatility in commodity markets, especially if growth stagnates in large industrialising emerging markets such as Brazil and China. The direction of the dollar’s movements, in part dependent on the uncertain extent and timing of Federal Reserve policies, will also play a major role in international demand for dollar-denominated commodities. Furthermore, as recent events such as the Volkswagen emissions scandal proved, when first platinum and later palladium prices came tumbling down, commodities are not immune to event risk.
ETF Securities has stepped in with the launch of their new S&L products to offer a means by which investors may better manage the increased volatility and changing dynamics of the currency and commodity markets.
“The launch of our 3x S&L commodity products and 5x S&L currency products is a natural extension to our existing unleveraged range and offers a greater choice to investors. 2015 has been a year of heightened currency volatility. We believe the additional leverage will first and foremost allow investors to use the currency products to hedge currency risk as well provide additional opportunities to trade on a short-term basis with a competitive total cost of ownership,” said Lansing.
All of the new S&L commodity ETPs use the US dollar as their base currency and carry total expense ratios of 0.98%. The new additions include:
ETFS 3x Daily Long Coffee
ETFS 3x Daily Short Coffee
ETFS 3x Daily Long Copper
ETFS 3x Daily Short Copper
ETFS 3x Daily Long Gold
ETFS 3x Daily Short Gold
ETFS 3x Daily Long Natural Gas
ETFS 3x Daily Short Natural Gas
ETFS 3x Daily Long Nickel
ETFS 3x Daily Short Nickel
ETFS 3x Daily Long Silver
ETFS 3x Daily Short Silver
ETFS 3x Daily Long Sugar
ETFS 3x Daily Short Sugar
ETFS 3x Daily Long Wheat
ETFS 3x Daily Short Wheat
ETFS 3x Daily Long WTI Crude Oil
ETFS 3x Daily Short WTI Crude Oil
The new S&L currency ETPs carry total expense ratios of 0.98% and include:
ETFS 5x Long EUR Short USD
ETFS 5x Short EUR Long USD
ETFS 5x Long EUR Short GBP
ETFS 5x Short EUR Long GBP
ETFS 5x Long USD Short GBP
ETFS 5x Short USD Long GBP